Meta Has a $10 Billion Ad Business Most Americans Never Use
Clicking the ad opens a chat in WhatsApp or Messenger, where shoppers in Brazil, India, and Southeast Asia buy straight from local stores.
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch · 20Growth: Meta CMO Alex Schultz on How All Founders Have to Change Their Marketing Playbook in a World of AI | Is AI Plateauing, What it Means if China Wins the AI Race and Why Zuck is a Generational LeaderMeta has a business worth more than $10 billion a year that many Americans have never used. Alex Schultz, Meta's chief marketing officer, calls business messaging its most underappreciated business.
The format is simple. Someone taps an ad on Facebook, Instagram, or WhatsApp's status tab, and instead of landing on a website, a chat thread opens in WhatsApp, Messenger, or Instagram Direct.
That chat is where the shopping happens. Schultz describes customers in Southeast Asia, Latin America, and India as having skipped the desktop, skipped mobile, and "went straight to a messaging first world." His examples are ordering from a local shop or booking a local hairdresser inside a chat.
Businesses pay Meta for the ad that starts the thread. Those "ads convert at a higher rate," Schultz says, which pushes up CPMs, the amount advertisers pay per thousand views. The last disclosed figure was more than $10 billion a year, disclosed about a year ago, and he expects tens of billions within a few years.
Questions people ask
Why would anyone shop in a chat instead of on a website?
In a chat, a shopper can ask questions, confirm stock, and arrange payment and delivery in one thread. In practice, that can be simpler than using a separate website, especially with a small local store. WhatsApp is already on the customer's phone, so there is nothing new to download.
Does Meta make other money from messaging?
Yes. Schultz describes a second business worth more than $1 billion a year from business verification messages, such as sending an Instagram password reset over WhatsApp instead of text messaging. Businesses pay Meta for that delivery, and Meta sells it in partnership with phone carriers around the world.
Why are Brazil and India so important to this?
WhatsApp is the dominant messaging app in both countries, and people do commerce there, Schultz says. He calls Brazil and India two of Meta's most important countries for revenue. He says they will be very, very important in four years.